High Valley Industries Corporation, New Delhi V. DCIT, Circle(NowACIT, Central Circle-7), Parwanoo

ITA 5991/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3167 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 21-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARUL SINGH
• Assessee Lawyers: VED JAIN ADV SH ASHISH GOEL
• Keywords: Set aside

Judgement Text

HIGH VALLEY INDUSTRIES CORPORATION VS. DCIT/ I.T.A. NO.5991/DEL/2017/A.Y.2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . . /. I.T.A NO.5991/DEL/2017 / ASSESSMENT YEAR:2013-14 M/S HIGH VALLEY INDUSTRIES CORPORATION, 414, DMALL, NETAJI SUBHASH PLACE, PITAMPURA, DELHI. VS. D CIT CENTRAL CIRCLE 7 DELHI. PAN NO. AADFH8325A APPELLANT / RESPONDENT /ASSESSEE BY SH. VED JAIN, ADV. SH. ASHISH GOEL, CA /REVENUE BY MS. PARUL SINGH, SR. DR / DATE OF HEARING: 1 7.11 .20 20 /PRONOUNCEMENT ON 1 8 .11 .20 20 /O R D E R PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS), SHIMLA DATED 28/10/2016 FOR A.Y. 2013 -14, CHALLENGING THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ACTION OF THE AO IN ALLOWING DEDUCTION U/S 80-IC TO RS. 61,09,281/- AS AGAINST R S. 2,44,37,125/-. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FIRM FILED ITS RETURN OF INCOME DECLARING NIL INCOME AFTER CLAIMING DEDUC TION U/S 80-IC AMOUNTING TO RS. 2,44,37,125/-. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SELF ADHESIVE TAPES AN D TRADING OF POLYMERS/RESINS. THE ASSESSEE STARTED ITS MANUFACT URING ACTIVITY/OPERATION ON 16 TH AUGUST, 2005 AND INITIAL ASSESSMENT YEAR FOR CLAIM OF DEDUCTION U/S 80-IC OF THE ACT WAS A.Y. 20 06-07. THE ASSESSEE HIGH VALLEY INDUSTRIES CORPORATION VS. DCIT/ I.T.A. NO.5991/DEL/2017/A.Y.2013-14 2 HAD ALREADY CLAIMED DEDUCTION U/S 80-IC TO THE EXTE NT OF 100% OF THE ELIGIBLE PROFIT FOR 5 YEARS PERIOD STARTING FROM AY 2006-07 TO AY 2010-11. IT WAS NOTICED THAT THE ASSESSEE FIRM HAD AGAIN CLA IM 100% DEDUCTION AGAINST ELIGIBLE PROFITS IN THE ASSESSMENT YEAR UND ER APPEAL WHICH IS THE 8 TH YEAR OF PRODUCTION OF THE FIRM BY CLAIMING TO HAVE CARRIED OUT SUBSTANTIAL EXPANSION IN AY 2011-12. THE AO HELD T HAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80-IC ONLY @ 25% AS AGAI NST THE CLAIM OF 100% MADE BY THE ASSESSEE. THE AO FOLLOWED THE ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF M/S HYCRON ELECTRONICS & OTHER S DATED 27 TH MAY, 2015. THE LD. CIT(A) ALSO FOLLOWING THE ABOVE ORDE R OF THE ITAT CHANDIGARH BENCH DISMISSED THE APPEAL OF ASSESSEE. 3. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT NOW THE ISSUE IS DECIDED BY THE HONBLE SUPREME HIGH COURT IN THE CASE OF PR. C IT VS. AARHAM SOFTRONICS REPORTED IN 412 ITR 623 (SC) IN WHICH IT WAS HELD AS UNDER: HELD ACCORDINGLY, (I) THAT AN UNDERTAKING OR AN ENT ERPRISE WHICH HAD SET UP A NEW UNIT BETWEEN JANUARY 7, 2003 AND APRIL 1, 2012 IN THE STATE OF HIMACHAL PRADESH OF T HE NATURE MENTIONED IN SECTION 80-IC(2)(II) WOULD BE ENTITLED TO DEDUCTION AT THE RATE OF 100% OF THE PROFITS AND GA INS FOR THE FIVE ASSESSMENT YEARS COMMENCING WITH THE INIT IAL ASSESSMENT YEAR. FOR THE NEXT FIVE YEARS, THE ADM ISSIBLE DEDUCTION WOULD BE 25% (OR 30% WHERE THE ASSESSEE I S A COMPANY) OF THE PROFITS AND GAINS. (II) THAT HOWEVER, IN A CASE WHERE SUBSTANTIAL EXP ANSION AS DEFINED IN SECTION 80-IC(8)(IX) IS CARRIED OUT BY S UCH AN UNDERTAKING OR ENTERPRISE, WITHIN THE PERIOD OF TEN YEARS, THE ASSESSMENT YEAR CORRESPONDING TO THE PREVIOUS Y EAR IN WHICH THE SUBSTANTIAL EXPANSION IS UNDERTAKEN WOULD BECOME THE INITIAL ASSESSMENT YEAR, AND FROM THAT ASSESSMENT YEAR THE ASSESSEE SHALL BE ENTITLED TO 1 00% DEDUCTIONS OF THE PROFITS AND GAINS. (III) THAT SUCH DEDUCTION, HOWEVER, WOULD BE FOR A TOTAL PERIOD OF TEN YEARS, AS PROVIDED IN SECTION 80-IC(6 ). FOR EXAMPLE, IF THE EXPANSION IS CARRIED OUT IMMEDIATEL Y, ON THE COMPLETION OF THE FIRST FIVE YEARS, THE ASSESSEE WO ULD BE ENTITLED TO 100% DEDUCTION AGAIN FOR THE NEXT FIVE YEARS. ON THE OTHER HAND, IF SUBSTANTIAL EXPANSION IS UNDERTA KEN, SAY, IN THE EIGHTH YEAR BY AN ASSESSEE SUCH AN ASSESSEE WOULD BE HIGH VALLEY INDUSTRIES CORPORATION VS. DCIT/ I.T.A. NO.5991/DEL/2017/A.Y.2013-14 3 ENTITLED TO 100% DEDUCTION FOR THE FIRST FIVE YEARS , DEDUCTION AT 25% OF THE PROFITS AND GAINS FOR THE N EXT TWO YEARS AND AT 100% AGAIN FROM EIGHTH YEAR AS THIS YE AR BECOMES THE INITIAL ASSESSMENT YEAR ONCE AGAIN. HOWEVER, THIS 100% DEDUCTION WOULD BE FOR THE REMAINING THRE E YEARS, I.E., THE EIGHTH, NINTH AND TENTH ASSESSMENT YEARS. 4. LD. DR ALSO STATED THAT NOW ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE ABOVE, SINCE THE ISSUE IS NOW DECIDED IN FAVOUR OF THE ASSESSEE. THEREFORE, ASSESSEE WOULD BE ENTI TLED FOR DEDUCTION U/S 80-IC FOR 100%. WE, ACCORDINGLY, SET ASIDE THE ORD ERS OF THE AUTHORITIES BELOW AND DIRECT THE AO TO GRANT DEDUCTION OF THE A SSESSEE U/S 80-IC AT 100%. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANIL CHATURVEDI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH NOVEMBER, 2020 * KAVITA ARORA, SR. P.S. COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, ITAT: DELHI BENCHES-DELHI